Why did the AnteoTech (ASX:ADO) share price tumble 13% on Monday

Key Points

• AnteoTech shares fall again on the back of a quarterly business update
• Management noted high barriers to market entry
• Company still in collaboration with TGA regarding regulatory approval for its RDT

The AnteoTech Ltd (ASX: ADO) share price tumbled today following the release of a business update from the company.

At market close, the nanotechnology company’s shares finished down 13.33% to 19.5 cents.

Ever since AnteoTech’s announcement last week regarding its EuGeni Reader and COVID-19 Rapid Diagnostic Test (RDT), its shares have dropped by 45%.

AnteoTech signals challenging market entry

Investors have continued to sell off AnteoTech shares after digesting the company’s business update for the second quarter of FY22.

According to the release, AnteoTech advised that its engagement with the Therapeutic Goods Administration (TGA) is ongoing. The company is hoping to achieve regulatory approval for its EuGeni Reader and COVID-19 RDT.

Management noted that governments worldwide are continuing to heavily regulate in-vitro diagnostic (IVD) devices for market entry.

The products must be supported by the manufacturer and integrate the support of OEM suppliers, distributors and supply chain organisations. While many companies close to AnteoTech have failed to adhere to the stringent guidelines, this has forced them to remove product batches or entire products from the market.

For AnteoTech, being associated with these companies has caused valuable reputational damage and is hindering further developments.

At the Annual General Meeting in November, CEO Derek Thomson presented the CY22 Revenue Generation Approach, outlining the four key areas of focus. These areas were increasing market footprint, regulatory approvals, building reputation, and maximising revenues.

The business team is expected to drive sales and marketing processes to sell to target segments. This will be executed by utilising the company’s global distribution network.

Looking at a financial standpoint, AnteoTech advised that cash receipts for the quarter totalled $2.13 million. This primarily came from a $1.96 million refund under the Federal Government’s Research & Development (R&D) tax incentive scheme.

Net cash outflows from operating activities stood at $0.61 million.

The Company stated it remains well-funded to support its near-term commercial and clinical milestones.

At the end of the calendar year, AnteoTech had $16.62 million cash on hand and no debt.

About the AnteoTech share price

Despite today’s heavy losses, the AnteoTech share price has advanced by 100% over the past 12 months.

The company’s shares reached an 8-month high of 41.5 cents on 24 January, before crashing back down.

Based on today’s price, AnteoTech has a market capitalisation of roughly $394.81 million, with more than 1.97 billion shares outstanding.

The post Why did the AnteoTech (ASX:ADO) share price tumble 13% on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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